Most Popular Questions
What happens if I separate or retire before the end of the plan year?
The balances in your Health Care FSA (HCFSA), Limited Expense Health Care FSA (LEX HCFSA) and Dependent Care FSA (DCFSA) are treated differently if you separate or retire before the end of the calendar year.
Your HCFSA or LEX HCFSA will terminate as of the date of your separation or retirement. There are no extensions. Any eligible health care expenses incurred prior to the date of separation will still be reimbursed but those incurred after the separation date are not reimbursable, even if you accelerated your allotments. If you used your entire elected amount before FSAFEDS has deducted it from your pay, you will not be responsible for the remaining allotments.
Your DCFSA remaining balance can continue to be used to pay for eligible dependent care expenses until your account balance is depleted or the end of the calendar year, whichever comes first.
Please note: In order to take advantage of the grace period for your DCFSA, you must be actively employed and making allotments through December 31 of the benefit period (plan year).
Example: Richard is enrolled in both a HCFSA and DCFSA for the benefit period but retires midway during the benefit year on July 1. He may only submit claims for health care expenses which are incurred prior to his July 1 separation date, but he can continue to incur dependent care expenses through December 31 of that benefit year or until his balance is depleted. He would not be eligible for the grace period under his DCFSA.